Future-Oriented Financial Statements for the year ending March 31, 2013

Military Police Complaints Commission

Statement of Management Responsibility

Military Police Complaints Commission (the Commission) management is responsible for these Future-Oriented Financial Statements, including responsibility for the appropriateness of the assumptions on which these statements are prepared. These statements are based on the best information available and assumptions adopted as at December 31, 2012, and reflect the plans described in the Report on Plans and Priorities.

The Future-Oriented Financial Statements of the Commission have not been audited.

(Original signed by)
Glenn Stannard
Chairperson

(Original signed by)
Sylvain Roy 
Chief Financial Officer

Ottawa, Ontario, Canada
March 15, 2013

 

Military Police Complaints Commission
Future-Oriented Statement of Financial Position (Unaudited)
As at March 31, 2013

(in dollars)
  Estimated
Results
2013
Forecast
2014
Liabilities
Departmental net financial position $289,740 $241,861
Accounts payable and accrued liabilities (note 6) $468,783 $478,158
Vacation pay and compensatory leave 75,321 106,711
Employee future benefits 152,382 152,382
Total net liabilities 696,486 737,251
     
Financial assets
Due from the Consolidated Revenue Fund $715,542 $729,853
Accounts receivable and advances (note 8) 52,156 53,199
Total net financial assets 767,698 783,052
     
Commission net debt (71,212) (45,801)
     
Non-financial assets    
Tangible capital assets (note 9) 218,528 196,060
Total non-financial assets 218,528 196,060
     

Information for the year ended March 31, 2013 includes actual amounts from April 1, 2012 to December 31, 2012.

The accompanying notes form an integral part of these financial statements.

(Original signed by)
Glenn Stannard
Chairperson

(Original signed by)
Sylvain Roy 
Chief Financial Officer

Ottawa, Ontario, Canada
March 15, 2013

 

Military Police Complaints Commission
Future-Oriented Statement of Operations and Departmental Net Financial Position (Unaudited)
For the year ended March 31

(in dollars)
  Estimated
Results
2013
Forecast
2014
Expenses
Departmental net financial position - Beginning of year 145,788 (289,740)
     
Departmental net financial position - End of year (289,740) (241,861)
Complaints Resolution Program $3,694,124 $4,369,743
Internal Services 2,208,752 1,467,789
Total expenses 5,902,876 5,837,532
 
Net cost of operations before government funding 5,902,876 5,837,532
     
Government funding
Net cash provided by Government 6,158,339 5,606,988
Change in due from the Consolidated Revenue Fund 34,074 14,311
Services provided without charge by other government departments (note 11) 145,991 168,354
Net cost of operations after government funding (435,528) 47,879
     

Segmented information (note 12)

The accompanying notes form an integral part of these financial statements.

Military Police Complaints Commission
Future-Oriented Statement of Change in Departmental Net Debt (Unaudited)
For the year ended March 31

(in dollars)
  Estimated
Results
2013
Forecast
2014
     
Departmental net debt - Beginning of year 266,663 (71,212)
     
Departmental net debt - End of year ($71,212) ($45,801)
Net cost of operations after government funding ($435,528) $47,879
     
Change due to tangible capital assets
Acquisition of tangible capital assets 145,000 61,920
Amortization of tangible capital assets (47,348) (84,388)
Total change due to tangible capital assets 97,652 (22,468)
     
Net increase (decrease) in Commission net debt (337,876) 25,411
     

The accompanying notes form an integral part of these financial statements.

Military Police Complaints Commission
Future-Oriented Statement of Cash Flows (Unaudited)
For the year ended March 31

(in dollars)
  Estimated
Results
2013
Forecast
2014
Operating Activities
Net Cash Provided by Government of Canada ($6,158,339) ($5,606,988)
Net cost of operations before government funding $5,902,876 $5,837,532
Non-cash items:
Services provided without charge by other government departments (note 11) (145,991) (168,354)
Amortization of tangible capital assets (47,348) (84,388)
Variations in Statement of Financial Position
Increase (decrease) in accounts receivable and advances (22,368) 1,043
Decrease (increase) in liabilities 258,919 (9,375)
Decrease (increase) in vacation pay (19,741) (31,390)
Decrease (increase) in employee future benefits 86,994 -
Cash used in operating activities 6,013,341 5,545,068
     
Capital Investment Activities
Acquisition of tangible capital assets 145,000 61,920
Cash used by capital investment activities 145,000 61,920
     

The accompanying notes form an integral part of these financial statements.

Notes to the Future-Oriented Financial Statements (Unaudited)
For the year ended March 31

1. Authority and Objectives

The Military Police Complaints Commission (the Commission) is an independent oversight agency, which reports to Parliament through the Minister of National Defence. It is a civilian body, external and independent of the Department of National Defence (DND) and the Canadian Forces (CF). The Commission was established in the fall of 1999 under Part IV of the National Defence Act (Sections 250.1 to 250.53). Its mandate is to monitor and review complaints about the conduct of the Military Police in performance of their policing duties or functions and to deal with complaints of interference in military police investigations.

2. Significant Assumptions

The Future-Oriented Financial Statements have been prepared on the basis of the government priorities and the plans of the Commission as described in the Report on Plans and Priorities.

The information in the estimated results for the fiscal year 2012-13 is based on the actual results as at December 31, 2012, and forecasts for the remainder of the year. Estimated year end information for 2012-13 is used as the opening position for the 2013-14 planned results, and forecasts have been made for the planned results for the 2013-14 fiscal year.

The main assumptions underlying the forecasts are as follows:

  1. The Commission activities have not changed from the previous year. The estimated results include the cost of ongoing hearings and investigations.
  2. Forecast of 2013-14 is based on the planned spending amounts presented in the 2013-14 Report on Plans and Priorities.

These assumptions are adopted as of December 31, 2012.

3. Variations and Changes to the Forecast Financial Information

While every attempt has been made to forecast final results for the remainder of 2012-13 and for 2013-14, actual results achieved for both years are likely to vary from the forecast information presented, and this variation could be material.

In preparing these Future-Oriented Financial Statements, the Commission has made estimates and assumptions concerning the future. These estimates and assumptions may differ from the subsequent actual results. Estimates and assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances.

Factors that could lead to material differences between the Future-Oriented Financial Statements and the historical financial statements include:

  1. The timing and amounts of acquisitions and disposals of property, plant and equipment may affect gains/losses and amortization expense;
  2. Implementation of new collective agreements; and,
  3. Further changes to the operating budget through additional new initiatives or technical adjustments later in the year.

Once the Report on Plans and Priorities is presented, the Commission will not be updating the forecasts for any changes to appropriations or forecasted financial information made in ensuing supplementary estimates. Variances will be explained in the Departmental Performance Report.

4. Summary of Significant Accounting Policies

The financial statements have been prepared using the Government's accounting policies stated below, which are based on Canadian public sector accounting standards. The presentation and results using the stated accounting policies do not result in any significant differences from Canadian public sector accounting standards.

Significant accounting policies are as follows:

(a) Parliamentary Authorities

The Commission is financed by the Government of Canada through Parliamentary authorities. Financial reporting of authorities provided to the Commission do not parallel financial reporting according to generally accepted accounting principles since authorities are primarily based on cash flow requirements. Consequently, items recognized in the Future-Oriented Statement of Operations and the Departmental Net Financial Position and in the Future-Oriented Statement of Financial Position are not necessarily the same as those provided through authorities from Parliament. Note 5 provides a reconciliation between the bases of reporting.

(b) Net Cash Provided by Government

The Commission operates within the Consolidated Revenue Fund (CRF) which is administered by the Receiver General for Canada. All cash received by the Commission is deposited to the CRF and all cash disbursements made by the Commission are paid from the CRF. The net cash provided by Government is the difference between all cash receipts and all cash disbursements including transactions between departments of the Government.

(c) Due from or to the Consolidated Revenue Fund

Amounts due from or to the CRF are the result of timing differences at year-end between when a transaction affects authorities and when it is processed through the CRF. Amounts due from the CRF represent the net amount of cash the Commission is entitled to draw from the CRF without further authorities to discharge its liabilities.

(d) Expenses - Expenses are recorded on the accrual basis

Vacation pay and compensatory leave are accrued as the benefits are earned by employees under their respective terms of employment.

Services provided without charge from other government departments and agencies are recorded as operating expenses at their estimated cost.

(e) Employee Future Benefits

  1. Pension benefits: Eligible employees participate in the Public Service Pension Plan (the Plan), a multi-employer plan administered by the Government of Canada. The Commission's contributions to the Plan are charged to expenses in the year incurred and represent its total obligation to the Plan. The Commission's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.
  2. Severance benefits: Employees entitled to severance benefits under labour contracts or conditions of employment earn these benefits as services necessary to earn them are rendered. The obligation relating to the benefits earned by employees is calculated using information derived from the results of the actuarially determined liability for employee severance benefits for the Government as a whole.

(f) Accounts Receivable

Accounts receivable are stated at the lower of cost and net recoverable value; a valuation allowance is recorded for receivables where recovery is considered uncertain.

(g) Tangible Capital Assets

All tangible capital assets having an initial cost of $3,000 or more are recorded at their acquisition cost. The Commission does not capitalize intangibles, works of art and historical treasures that have cultural, aesthetic or historical value. Amortization of tangible capital assets is assessed on a straight-line basis over the estimated useful life of the asset as follows:

Asset Class Amortization Period
Informatics hardware 3 years
Software 3 years
Equipment 3 - 5 years
Leasehold improvements 10 years

(h) Measurement Uncertainty

The preparation of these financial statements requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses reported in the financial statements. At the time of preparation of these statements, management believes the estimates and assumptions to be reasonable. The most significant items where estimates are used are the liability for employee future benefits and the useful life of tangible capital assets. Actual results could significantly differ from those estimated. Management's estimates are reviewed periodically and, as adjustments become necessary, they are recorded in the financial statements in the year they become known.

5. Parliamentary Authorities

The Commission receives its funding through annual Parliamentary authorities. Items recognized in the Future-Oriented Statement of Operations and the Departmental Net Financial Position and the Future-Oriented Statement of Financial Position in one year may be funded through Parliamentary authorities in prior, current or future years. Accordingly, the Commission has different net results of operations for the year on a government funding basis than on an accrual accounting basis. The differences are reconciled in the following tables:

(a) Reconciliation of Net Cost of Operations to Current Year Authorities Used

  Estimated
Results
2013
Forecast
2014
(in dollars)
Current year authorities used $5,941,677 $5,615,071
Net cost of operations before government funding $5,902,876 $5,837,532
     
Adjustments for items affecting net cost of operations
but not affecting authorities
Services provided without charge (145,991) (168,354)
Amortization of tangible capital assets (47,348) (84,388)
Change in employee future benefits 86,994 -
Revenue not available for spending 19,617 -
Change in vacation pay and compensatory leave (19,471) (31,640)
Refunds of prior year's expenditures - -
Total items affecting net cost of operations but not affecting authorities (106,199) (284,381)
     
Adjustments for items not affecting net cost of
operations but affecting authorities
Acquisition of tangible capital assets 145,000 61,920
     

(b) Authorities Provided and Used

  Estimated
Results
2013
Forecast
2014
Authorities provided (in dollars)
Current year authorities used $5,941,677 $5,615,071
Vote 25 - Operating expenditures $3,409,681 $5,270,441
Special Purpose $5,077,650 -
  8,487,331 5,270,441
Statutory amounts 302,357 344,630
  8,789,688 5,615,071
Less:    
Authorities available for future years - -
Lapsed: Operating (2,848,011) -
     

6. Accounts Payable and Accrued Liabilities

The following table presents details of accounts payable and accrued liabilities

  Estimated
Results
2013
Forecast
2014
(in dollars)
Total accounts payable and accrued liabilities $468,783 $478,158
Accounts payable - Other government departments and agencies $75,589 $77,101
Accounts payable - external suppliers 338,056 344,817
Total accounts payable 413,645 421,918
     
Accrued liabilities 55,138 56,240
     

7. Employee Future Benefits

(a) Pension Benefits

The Commission's employees participate in the Public Service Pension Plan, which is sponsored and administered by the Government of Canada. Pension benefits accrue up to a maximum period of 35 years at a rate of two percent per year of pensionable service, times the average of the best five consecutive years of earnings. The benefits are integrated with Canada/Quebec Pension Plans benefits and they are indexed to inflation.

Both the employees and the Commission contribute to the cost of the Plan. The 2012-13 forecast expense amounts to $212,255 and $241,930 in 2013-14.

The Commission's responsibility with regard to the Plan is limited to its contributions. Actuarial surpluses or deficiencies are recognized in the financial statements of the Government of Canada, as the Plan's sponsor.

(b) Severance Benefits

The Commission provides severance benefits to its employees based on eligibility, years of service and salary at termination of employment. These severance benefits are not pre-funded. Benefits will be paid from future authorities. Information about the severance benefits, measured as at March 31, is as follows:

As part of collective agreement negotiations with certain employee groups, and changes to conditions of employment for executives and certain non-represented employees, the accumulation of severance benefits under the employee severance pay program ceased for these employees commencing in 2012. Employees subject to these changes have been given the option to be immediately paid the full or partial value of benefits earned to date to collect the full or remaining value of benefits on termination from the public service. These changes have been reflected in the calculation of the outstanding severance benefit obligation.

  Estimated
Results
2013
Forecast
2014
(in dollars)
Accrued benefit obligation, end of the year $152,382 $152,382
Accrued benefit obligation, beginning of the year $239,376 $152,382
Expense for the year (86,994) -
Benefits paid during the year - -

8. Accounts Receivable and Advances

The following table presents details of accounts receivable and advances

  Estimated
Results
2013
Forecast
2014
(in dollars)
Total $52,156 $53,199
Receivables from other government departments and agencies $51,656 $52,699
Petty cash advance 500 500
     

9. Tangible Capital Assets

Capital Asset Class Cost
(in dollars)
Opening Balance Acquisitions Disposals and write-offs Closing Balance
Total $858,107 $61,920 - $920,027
Informatics Hardware $333,857 - - $333,857
Software 194,614 - - 194,614
Equipment 193,442 61,920 - 255,362
Leasehold Improvements 136,194 - - 136,194


Capital Asset Class Accumulated Amortization
Opening Balance Amortization Disposals and write-offs Closing
Balance
Total $639,579 $84,388 - $723,967
Informatics Hardware $329,897 - - $329,897
Software 51,334 58,384 - 109,718
Equipment 193,442 12,384 - 205,826
Leasehold Improvements 64,906 13,619 - 78,525


Capital Asset
Class
Net Book Value
2014 2013
Total $196,060 $218,528
Informatics Hardware $3,960 $3,960
Software 84,896 143,280
Equipment 49,536 -
Leasehold Improvements 57,669 71,288

Amortization expense for the year ended March 31, 2014 is estimated at $84,388 and for the year ended March 31, 2013 is estimated at $47,348.

10. Contractual Obligations

The nature of the Commission's activities can result in some large multi-year contracts and obligations whereby the Commission will be obligated to make future payments when the goods and services are received. The significant contractual obligation that can be reasonably estimated is summarized as follows:

Fiscal Period Amount
(in dollars)
Occupancy Instrument  
2012–13 $326,706
2013–14 $344,005
2014–15 $344,005
2015–16 $344,005
2016–17 $344,005
2017–18 (expires May 31, 2017) $57,334

11. Related Party Transactions

The Commission is related as a result of common ownership to all Government departments, agencies and Crown Corporations. The Commission enters into transactions with these entities in the normal course of business and on normal trade terms. In addition, the Commission has an agreement with Public Works and Government Services Canada related to the provision of financial and human resource services. During the year, the Commission received common services which were obtained without charge from other Government departments and agencies as disclosed below.

(a) Common Services Provided Without Charge by Other Government Departments

During the year, the Commission received services without charge from certain common service organizations, related to the employer's contribution to the health and dental insurance plans. These services provided without charge have been recorded in the Future-Oriented Statement of Operations and Departmental Net Financial Position as follows:

  Estimated
Results
2013
Forecast
2014
(in dollars)
     
Employer's contribution to the health and dental insurance plans $145,991 $168,534

The Government has centralized some of its administrative activities for efficiency, cost-effective purposes and economic delivery of programs to the public. As a result, the Government uses central agencies and common service organizations so that one department performs services for all other departments and agencies without charge. The cost of these services, such as the payroll and cheque issuance services provided by Public Works and Government Services Canada are not included in the Commission's Future-Oriented Statement of Operations and Departmental Net Financial Position.

(b) Other Transactions with Related Parties

  Estimated
Results
2013
Forecast
2014
(in dollars)
     
Expenses - other government departments and agencies $854,219 $871,303

Expenses disclosed in (b) exclude common services provided without charge, which are already disclosed in (a).

12. Segmented Information

Presentation by segment is based on the Commission's Program Activity Architecture. The presentation by segment is based on the same accounting policies as described in the Summary of Significant Accounting Policies in note 2. The following table presents the expenses incurred for the main program activities, by major object of expenses. The segment results for the period are as follows:

  Complaints Resolution Program Internal Services Estimated
Results
2013
Forecast
2014
Operating expenses (in dollars)
Net cost of operations before government funding $3,694,124 $2,208,752 $5,902,876 $5,837,532
Professional and special services $1,667,597 $1,251,164 $2,918,761 $2,727,090
Salaries and employee benefits 1,667,215 490,186 2,157,401 2,525,255
Accommodation and other rentals - 383,200 383,200 344,000
Transportation and telecommunications 264,916 - 264,916 92,880
Utilities, material and supplies 73,150 - 73,150 48,440
Printing and publishing 21,246 36,854 58,100 15,480
Amortization of tangible capital assets - 47,348 47,348 84,388
 
Total operating expenses $3,694,124 $2,208,752 $5,902,876 $5,837,532
 
Date modified: